Gradual shift from selling chemicals to selling solutions, Cisco suggests as international chemicals companies scramble to fast-track their digital transformation journeys as Cisco confirms that 40% of Fortune 500 companies will not exist in a meaningful way in ten years
March 16 2018: As a key sector of the South African economy, the chemicals industry accounts for about 25% of the nation’s manufacturing sales and is the most developed of its kind in Africa, according to the Chemical and Allied Industries’ Association, an industry group.
“To seize the Industry 4.0 opportunity, Cisco believes that chemical companies should leverage digital tools and capabilities to detect shifts in markets, develop more accurate and agile planning, heighten customer awareness and collaborate with business partners throughout the value chain,” says Bruce Peters, Regional manager in charge of manufacturing at Cisco Southern Africa.
“We are seeing more and more chemical companies evolving. They are no longer selling chemicals; they’re selling solutions to customers’ problems through connectivity or across digital platforms,” says Peters.
Innovation in the chemicals industry relies on a number of enabling technologies, such as micro-and nanotech, industrial biotechnology, advanced materials, and photonics. In turn, all these enabling technologies require an intelligent and intuitive network that links them to each other and allows employees to collaborate across the company and with suppliers and customers. This is where a smart network that can protect itself can give chemical manufacturers an edge.
The very real threat of industrial espionage and data breaches, as well as the need to protect valuable intellectual property, bring with them understandable concerns in the chemicals industry. In addition, the materials and products that the chemicals industry uses and manufactures are by their very nature often in need of strict management, resulting in a hesitancy to deploy new technologies, such as digital transformation. But that does not mean that digital transformation is a pipe dream for the chemicals industry.
Chemical companies that understand this are implementing a digital ready network – a software-defined network with inbuilt end-to-end security, a network that can be automated, a network with analytics and assurance built in, a network where policy can be implemented and monitored in real time – essentially the network as a sensor and enforcer.
International chemicals companies are fast-tracking their digital transformation, often with the help of governments. One example is Singapore’s “Smart Nation” drive, which aims to leverage Internet of Things technologies to improve the quality of life of the country’s citizens, infrastructure and industrial sector. Another example is chemicals giant Dow, with about 53,000 employees and revenue of close to $ 57 billion, which produces more than 6,000 science – and technology – based products for customers in more than 180 countries. It does this using collaboration tools from Cisco and the Internet of Things to help address many of the world’s most pressing issues. The collaboration tools have resulted in increased productivity, have fuelled innovation with closer connections between employees, and have allowed Dow to connect easily with suppliers and achieve better visibility across its supply chain.
“But we also know that at least one consulting firm (Accenture) is firmly of the opinion that we need to leverage off international knowledge to provide uniquely African ways of enabling digital transformation, rather than simply copying international methodology/solutions,” says Peters.
Cisco’s view is that local chemical manufacturers, such as Sasol*, have shown that South African chemical companies are doing digital transformation already, and that all digital transformation is ultimately built on a network.
Traditionally, the chemicals business views security as paramount. This means visibility of the whole manufacturing chain, from supply to delivery, is key. This visibility, however, can only be achieved if all aspects of the business are connected in a single system, and only if the network used to connect solutions is secure, Peters says.
Intent-based networking is the difference between a network that needs continuous attention and one that simply understands what you need and makes it happen.
“It’s the difference between doing thousands of tasks manually and having an automated system that helps you focus on business goals. Virtualisation, automation, analytics, and cloud, all in one architecture, are what enable traditional businesses such as the chemicals industry to deliver more secure, yet uniquely African solution for the African environment,” Peters says.
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